Economic Survey of Italy 2005: Human capital and the labour market

 

The following OECD assessment and recommendations summarise chapter 5 of the Economic Survey of Italy 2005  published 18 May 2005. It covers one of the main challenges identified in chapter 1.

How can education quality be improved?

Compared with other OECD countries, an above-average proportion of the Italian population has only lower-secondary education. This is especially true for older age-groups, but it is also true for younger ones. Forty per cent of 25-34 year-olds are in this category compared with an EU and OECD average close to 25%, and the results of the OECD Programme for International Student Assessment (PISA) show that Italian 15-year olds have attainments well below the average in particular in mathematical and problem-solving skills. There is a high proportion of youth which is in neither education nor the labour force, suggesting a difficult school-to-work transition. The risk of unemployment later in life is also considerably higher for those with only lower secondary education. The policy reaction to these features has been to raise the number of years of compulsory schooling from 10 to 12, and to reform the structure of primary and secondary education in major ways, including improving the school-to-work transition in the form of a vocational track, as detailed in the previous OECD Survey. These reforms go very much in the right direction, and should be monitored to ensure that they are achieving their goals. Job-related training should be the next priority.

Furthermore, a smaller proportion than the OECD average has completed tertiary education, even though a relatively high proportion embarks on it. Years spent in obtaining an undergraduate degree are greater than the average, raising the opportunity cost of tertiary education and discouraging the formation of high level skills. The demand for high-skill workers may be hampered by the specialisation of Italian industries in low tech sectors and the small size of Italian firms, which reduce their R&D spending capability. At the tertiary level, a problem is an insufficient number of younger professors, for whom there are barriers to entry. Academic appointments lack transparency, promotion is not always linked to productivity, and Italy spends far less than the OECD or EU average on research and development, and significantly less on tertiary education. As a consequence Italy suffers from a pronounced net brain-drain. At the same time, administrative barriers to the recognition of foreign degrees and other professional qualifications mean that Italy misses out on the diffusion of high-level technical skills, experience and knowledge from abroad. These shortcomings should be addressed with urgency. Policies here should concentrate on increasing the size of the teaching body, and making it easier for qualified persons, including foreigners, to occupy posts on merit and, eventually, with greater security of employment than is currently the case.

Business R&D intensity and researchers (1)
2001 (2)


1. Business enterprise sector R&D expenditure as a percentage of value added in industry, in 2001 or latest available year.
2. Or latest year available.
Source: OECD, Science, Technology and Industry Scoreboard, 2003.

Although Italy does not face an immediate crisis, and politically difficult reforms (for example in the labour market and to pensions) have been launched, the economy is still experiencing a gradual erosion of its internal dynamism, its external competitiveness, and a still insufficient action to put public finances on a sustainable long-term footing. The slowness of the deterioration should not obscure the need to change these trends, nor to underestimate the time it will take to do so even after the necessary reforms are implemented. This is all the more reason why such reforms should not be delayed.

 

Return to the OECD Economic Survey of Italy 2005 homepage.


A printer-friendly Policy Brief (pdf format) may also be downloaded. The Policy Brief contains the executive summary and the OECD assessment and recommendations, but does not include all of the charts available from the above pages

Una nota di sintesi stampabile (formato PDF) puó anche essere scaricata. Contiene le conclusioni e le raccomandazioni ma non tutti i grafici inclusi nelle pagine in alto.
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